Pages

Monday, May 09, 2016

A whole lot of cooking going on ..

Regular readers of theSocialist
Standardwill
be familiar with theCooking
the Bookscolumn
which usually comprises of two succinct separate articles
each month dealing with economic matters in an accessible
way for the general reader. (Updated December 21 2016 M.C.)

__________________________

2016

1. Osborne, Mao, Same Struggle

It was a good idea to twit
George Osborne about his new-found love for the
dictatorship in China to make the point that, when it
comes to finding markets and investment outlets, ideology
doesn’t matter. What does instead is the material,
economic interest of the capitalist class, and that
Osborne, as one of their governmental representatives,
served this interest on his recent visit to China, despite
it being a dictatorship and, to boot, one that (falsely)
claims to be socialist.Read
>

January

2. Capitalism Goes into Space

The Dutch Marxist, Anton
Pannekoek, once wrote that because the Earth’s size was
limited so would capitalism be, implying that when
capitalism had extended to the whole of the globe it would
come to an end. This conclusion might have been
reassuring, but it was never a rigorous argument. The
Earth’s size has nothing to do with the lifespan of
capitalism. But, if it had, Pannekoek had overlooked the
possibility of capitalism extending itself beyond the
Earth; surprising since he was a professor of astronomy,
but he was writing in 1942.>Read

1. A Parasite on Parasites

Harry Hyams, who died in
December, was one of the ‘unacceptable faces of
capitalism’ in the 1970s, though the then Tory Prime
Minister Edward Heath had coined the term in relation to
another ruthless capitalist. Hyams’ notoriety was based on
what he did with Centre Point, for a while the tallest
building in London, as described by his obituary in
theTimes (22 December):

‘Centre Point was completed in 1966
at a cost of £5.5 million. However, within seven years and
still without tenants, its value was estimated at £20
million. In an era of rapidly rising rents, it was worth
more as an unoccupied asset.’Read
>

February

2. But Who Owns the Machines?

‘STEPHEN HAWKING Says We Should Really Be Scared of
Capitalism, Not Robots’ wrote Alexander C Kaufman, the
Business Editor of the Huffington Post, last 8 October.
Hawking didn’t actually use the word capitalism but he
might as well have done:

‘If machines produce everything
we need, the outcome will depend on how things are
distributed. Everyone can enjoy a life of luxurious
leisure if the machine-produced wealth is shared, or
most people can end up miserably poor if the
machine-owners successfully lobby against wealth
redistribution. So far, the trend seems to be toward the
second option, with technology driving ever increasing
inequality.’Read
>

1. Swizz Banking?

Swiss banking reformers have
obtained the 100,000 signatures needed to initiate a
referendum to restrict bank lending or, as they put it, to
stop banks benefiting from being able to create electronic
money out of nothing.

Explaining the apparent logic behind
the proposal in the Financial Times (5/6 December), Martin
Sandhu wrote:

‘The bank decides whether it wants
to make you a loan. If it does, then it simply adds the
loan to its balance sheet as an asset and increases the
balance in your deposit account by the same amount (that’s
a liability for them). Voilà; new electronic money has
been created.’ Read
>

March

2. The Face of Capitalism

'I find it terrible that we
allow companies to behave like this', an unnamed Tory
minister told Times columnist, Rachel Sylvester (26
January) commenting on the Google tax row.
'It gives capitalism a bad name'. It's the 'unacceptable
face of capitalism' all over again (as if capitalism had
an acceptable one).

But those in charge of Google and
other corporations operating in many different countries
did nothing against either the economic logic or the legal
code of capitalism. Capitalism's economic logic is to
maximise the 'self-expansion of capital', i.e., to make as
much profit as possible to invest as more capital, and it
is the legal duty of those in charge of investing other
people's money to ensure that the investors get the
maximum return on their investment.Read
>

1. George Osborne, Paul Mason and
Marx

Speaking
in the House of

Commons on 1 March George
Osborne called the journalist and broadcaster Paul Mason a
‘revolutionary Marxist’.

To which Mason indignantly
replied: ‘As to Mr Osborne’s claim that I am
‘revolutionary Marxist’ it is completely inaccurate. I am
a radical social democrat who favours the creation of a
peer-to-peer sector (co-ops, open source, etc) alongside
the market and the state, as part of a long transition to
a post-capitalist economy. There’s a comprehensive
critique of Bolshevism in my latest book,Postcapitalism:
A Guide to Our Future.’ >Read

April

2.McDonnell’s
Mantra

Labour Shadow Chancellor John
McDonnell is apparently going around repeating the mantra
‘Investment, investment, investment’ as the solution to
the woes of British capitalism. Labour activist Michael
Burke wrote justifying this in Ken Livingstone’s online
Socialist Economic Bulletin on 25 February. He
started off well enough:

‘… contrary to George Osborne
(and those on the left who are confused and echo him) it
is not possible for consumption, or wages to lead
economy recovery.’ Read
>

1. When Supply Exceeds Demand ….

The capitalist class is not a
monolithic block with a single interest. They are united
of course in wanting capitalism to continue and a
government to enforce their ownership, but beyond that
it’s a mass of often conflicting sectional interests of
particular groups, industries and firms. An important role
of governments is to arbitrate between these conflicting
interests.

The current crisis in the British
steel industry is a case in point. Tata, the India-based
capitalist conglomerate which owned the Port Talbot
steelworks (which shows that capitalism is international
and that the Leninist theory that imperialist Britain
exploits capitalist India is nonsense – they’re all in it
together), wanted to dispose of it as it wasn’t making a
profit. In fact it was said to have been making a loss of
£1 million a day. No capitalist firm is going to put up
with that for long. Read
>

May

2. … and When Demand Exceeds
Supply

There is a housing shortage in
London. Or rather, paying demand for accommodation in
London exceeds supply for sale, which is not necessarily
the same thing. There are probably enough buildings in
London to house everybody, certainly enough so that nobody
need be homeless or live in accommodation without basic
amenities. The Times (12 April), for instance, reported:

‘A growing glut of luxury homes in
inner London could encourage developers to turn them into
offices, according to a report that says the total floor
space of top-end apartments in the pipeline would be
enough to cover Hyde Park.’

In the argument over whether to Leave or Remain in
the EU is in the better overall interest of British
capitalism, which the media and politicians are urging us
to get embroiled in, the Remain side would arguably seem
to have the stronger case – from a capitalist point of
view that is, of course.

British capitalism benefits from
unrestricted access to the single European market and also
from having a say in drawing up its rules and regulations.
It also benefits from being part of a large trading bloc
in negotiations with other states and blocs, on the same
principle behind trade unionism that ‘unity is strength’:
you can get a better deal when negotiating as a group
rather than individually.Read
>

June

2. Mises is Irrelevant

The 'Weekly Worker' (28 April) carried an
interesting article by the Trotskyoid Hillel Ticktin
which, unusually for someone from his political
background, gave a good description of socialism which
(also unusually) he called socialism:

‘A distinguishing mark of socialism
is that distribution would operate according to need,
rather than input … people will be able to walk into a
distribution point and pick up what they need.’

‘In a socialist society you would
expect workers to work in the way that they judge is
correct. Since a worker’s incentive under socialism is not
money, they work as best they can in order that they not
only fulfil what they are doing for the collectivity, but
for themselves. You would expect that they would work as
well as they can, without any need for discipline from
outside.’Read
>

1. No Basic Change

In June Swiss voters – they get the interesting
things to vote on – rejected a proposal to introduce a
basic income from the state for everyone as of right
whether they are working or not. Perhaps surprisingly,
only 23 percent voted for with an overwhelming 77 percent
against.

According to theTimes(6
June), critics denounced the proposal as a ‘Marxist
dream’. We don’t think Marx did dream of a basic income.
What he had in mind was the abolition of the wages system
and its replacement by ‘from each according to ability, to
each according to need’. This would mean that, after
cooperating to produce things and provide services, people
would have free access, without having to pay, to what
they needed to live and enjoy life.Read
>

July

2. Saving Private Capitalism

American capitalism is, apparently,
suffering a ‘crisis of faith’, at least according to a
5-page article featured on the front
cover of Time magazine (23 May). The author, Rana
Foroobar, quotes the findings of an opinion poll which she
finds ‘startling’:

‘… only 19% of Americans aged 18 to
29 identified themselves as “capitalists”. In the richest
and most market-oriented country in the world, only 42% of
that group said they “supported capitalism”. The numbers
were higher among older people; still, only 26% considered
themselves capitalists. A little over half supported the
system as a whole.’

One of the questions must have been
odd if it invited people to identify themselves as
‘capitalists’ in the same sort of way that they might have
been asked if they were socialists. A capitalist is not
someone who believes in capitalism. It is someone who has
enough capital to be able to live without being obliged
to sell their labour power for a living. In America that
will be well under 5 percent. Read
>

1. Crocodile Tears for the ‘Have-nots’

Commenting the day after the result of the vote for
Brexit, Times Economics Editor Philip Aldrick wrote:

‘Working class Britons have treated this momentous
referendum as a protest vote to register their anger with
globalisation, immigration and elitism’.

He was using ‘working class’ in the occupational
sense of manual and industrial workers whereas, in the
economic sense, it refers to all obliged by economic
necessity to try to sell their mental and physical
energies to an employer for a wage or a salary. In other
words, nearly everybody except for capitalists and other
rich people, making up well over 90 percent of the
population. Nearly half of these who took part in the
referendum voted for things to remain as they are. Read
>

August

2. Lies, Damned Lies and
Statistics

It is generally recognised that during the
referendum campaign the Brexit side relied on lies – about
how much Britain paid to the EU, about how the EU worked,
about Turkey being about to join – over and above the
usual empty promises of politicians as to how things would
be better if they won. The Remain side relied more on
misleading statistics.

In April the Treasury released a study purporting to
show that a ‘Vote to Leave would make British households
£4,300 worse off’ by 2030 (Independent, 18 April). The
Remain side immediately translated this into a poster
proclaiming ‘£4300 cost to UK families if Britain leaves
the EU’. This figure was misleading because it was based
on the assumption that Britain left the single market as
well as the EU institutions; which does not have to be,
and might well turn out not to be the case. Read
>

Negative Interest?

‘NatWest has become the first bank to warn business
customers it may charge negative interest rates on money
held in current accounts’, reported the Daily Telegraph (25
July). But how can there be negative interest rates? Why
would anyone lend money for a period only to get less back
at the end of it?

Interest is the price of borrowing money and is governed by
supply and demand, more by demand in fact. The rate of
interest (or, rather, rates as there are different ones
depending on the risk of non-repayment) reflects the state
of the economy. When business is slack, due to a lack of
enough profitable investment opportunities, the rate is low
because supply, as from companies not reinvesting profits,
is more than what other companies want to borrow. In times
of recovery and boom, when profit prospects are seen to be
good, it is the other way round. Demand exceeds supply
and the rate tends to rise. Read
>

September

Who Funded the Brexit Campaign?

After the EU referendum the Electoral Commission
released figures on the funds received by the two sides.
They showed that the Leave side spent about £17.6 million
and the Remain only £14.3 million. These were not
contributions from grass-roots supporters but, on both
sides, from individual capitalists. Since staying in the
EU, and especially the single market, was in the overall
interest of the majority section of the British capitalist
class, how come that capitalists gave more to Leave than
Remain? In fact, who were the capitalists who funded the
Leave campaign, and why?

What all these have in common (apart from most of them
appearing in the Sunday Times Rich List) is that they are
involved in hedge funds and other such financial
activities. Read
>

Dreaming of Ending Poverty

‘Ending poverty need not be a utopian dream’, was the headline of an article by Philip Collins in the Times
(2 September), subheaded ‘Thomas More’s vision of a perfect society may
be outlandish but it reminds us that Britain can change for the
better.’
This year is the 500th anniversary of the publication of More’s Utopia
in Latin. An English translation appeared in 1551. More did imagine a
regimented society with for instance, as Collins pointed out, everyone
having to dress the same. But it is not this aspect that has interested
socialists. It’s his imaging a society without private property where
there is planned production to meet needs and whose members have free
access to what they need ‘without money, without exchaunge, without any
gage, pawne, or pledge.’ Read >

October

Beyond Economics

This year is also the 50th anniversary of Star Trek.
Although not the main theme, or even a minor one, it is clear from the
characters’ behaviour and occasional asides (at least in the first two
series) that it’s a money-free world. Set in the 23rd and 24th
centuries, scarcity no longer exists as anything material needed to
meet human needs can be produced by ‘replicators’. This prompted one
trekkie, Manu Saadia, to write Trekonomics: the Economics of Star Trek that appeared earlier this year and which sparked a discussion on ‘post-scarcity economics’.
Actually, ’post-scarcity economics’ is a contradiction in terms as
academic economics defines itself as the study of how societies and
individuals allocate scarce resources. Read >

The Sinking Pound

‘Hard Brexit fears push sterling to a fresh
low’ read the headline in the Times (7 October)
reporting that the pound had fallen to its lowest level
against the dollar for 31 years. Others are suggesting
that it could eventually fall, ironically, to £1 = 1 Euro.
Until 1973 most of the world’s currencies were tied to a
fixed rate with the US dollar and so also to each other.
If a country wanted to change this it had to get the
agreement of the IMF. Governments tried to avoid such a
formal devaluation as this was regarded as a recognition
that they could not control the part of the capitalist
economy they presided over as they had claimed in order to
get elected. Read
>

November

John McDonnell Imagines

AT THE end of his speech to the Labour Party conference in
September, shadow chancellor John McDonnell offered a
definition of socialism. Invoking John Lennon he orated:

‘Imagine the society that we can create. It’s a society
that’s radically transformed, radically fairer, more equal
and more democratic. Yes, based upon a prosperous economy
but an economy that’s economically and environmentally
sustainable and where that prosperity is shared by all.
That’s our vision to rebuild and transform Britain. In
this party you no longer have to whisper it, it’s called
socialism.’

Evidently McDonnell hasn’t got much of an imagination as
this is something that politicians in the other parties
can, and do, subscribe to without calling it socialism.
They’re right. It isn’t. Read
>

Cashless but Not Profitless

‘Apple’s latest ambition is to rid the world of cash’ reads the
headline in the Times (20 October), reporting Apple’s chief executive,
Tim Cook, saying ‘we would like to be a catalyst for taking cash out of
the system.’ The prospect of a ‘cashless society’ has been held out
before. Apple’s plan is that people should use its smartphones to pay
for things instead of cash or a cheque or even a debit or credit card.
A cashless society is not the same as a moneyless society, for a
reason hinted at in a turn of phrase used by Christopher Burniske,
described as ‘an analyst of digital currency’:
‘Apple’s is building a payment structure where you can use all kinds of digital means to transfer value.’
Actually, transferring value is not a bad way of describing one of
the functions of money, that of being a means of exchanging values. Read >

December

Jack London Was Wrong

The writer Jack London died a hundred years ago last month. He is
more known for his adventure stories than for his economics but The Iron
Heel published in 1907 has a chapter ‘The Mathematics of a Dream’ in
which the hero, Ernest Everhard, sets out to ‘develop the inevitability
of the breakdown of the capitalist system’ and ‘demonstrate
mathematically why it must break down.’
Everhard summarises his argument:
‘We found that labour could buy back with its wages only so much of
the product, and that capital did not consume all of the remainder of
the product. We found that when labour had consumed to the full extent
of its wages, and when capital had consumed all it wanted, there was
still left an unconsumed surplus. We agreed that this surplus could only
be disposed of abroad. Read >